The board of the foundation

The law lays down the basic organisational requirements for a foundation. These include the requirement that every foundation have its own organisational rules (set out in the articles of association), that it have no members and that it have a board. Because there are no members or shareholders, the board is the most important body of the foundation.

Division of responsibilities and board duties

Subject to any limitations set out in the articles of association, the board is responsible for managing the foundation (Article 2:291 BW). The law does not prescribe the composition of a foundation’s board, but in practice it is common for a foundation to have at least three board members: a chair, a secretary and a treasurer. This is, however, not mandatory. Where a foundation has only one board member, that person will perform all three roles.

Representation

The board represents the foundation (Article 2:292 BW). The articles of association may confer the authority to represent on one or more board members. In addition, the articles may provide that a board member may only represent the foundation jointly with others. The board may also grant a power of attorney to someone other than a board member to represent the foundation. Based on this authorisation, that person may also represent the foundation.

Conflicts of interest

A foundation is subject to the conflict of interest rules in Article 2:291(6) BW, which are the same as those for NVs and BVs. These rules provide that a board member who has a direct or indirect personal conflict of interest may not take part in the board’s deliberations and voting.

If no resolution can be adopted because all board members have a conflict of interest, but a supervisory board has been established under the articles of association, the latter body is authorised to adopt the resolution. In the absence of a supervisory board, the board remains authorised to adopt the resolution, provided that the reasons underlying the resolution are recorded in writing, unless the articles of association provide otherwise.

If a board member participates in deliberations and adoption of resolutions despite a conflict of interest, the resolution is voidable. Breaching the duty to act with full transparency in relation to conflict-of-interest situations and to inform fellow board members properly may also be grounds for the dismissal of the board member.

Remuneration

Each foundation is free to determine whether to grant remuneration to its board members. In most foundations, board members carry out their duties without remuneration. If an (expense) allowance is paid, it may be advisable not to exceed the maximum volunteer’s allowance (€1,900 in 2023). If more than this maximum is paid, payroll tax returns must be filed for that board member.

Stepping down as a board member

A board member who wishes to resign must do so in writing. The resignation must reach the legal entity and is therefore addressed to the other board members. The board will then discuss collectively how to find a new board member for the vacant position. Often the articles of association stipulate how a vacancy is to be filled. Ultimately, a new board member is appointed at a board meeting.